Dowling v. Pension Plan for Salaried Employees of Union Pacific Co., No. 16-1977 (3d Cir. 2017)Annotate this Case
Union Pacific employee Dowling became totally disabled by multiple sclerosis in 1997. His disability benefits ended in 2012 when he reached age 65 and began to draw a pension. Instead of calculating Dowling’s pension based on Dowling’s last 10 years of actual work—ending in 1997—the administrator operated as if Dowling had worked and been paid his final base salary— $208,000 per year— for his credited years of service, until his retirement in 2012, even though Dowling had not actually worked during that period. Dowling is covered by a 277-page retirement plan composed of introductory material, 19 articles of content, and various appendices—none of which explicitly address Dowling’s precise situation. The administrator’s interpretation provides Dowling with a lower monthly payment than he expected. Dowling challenged the administrator’s decision as contradicting the plan’s plain language. In Dowling’s suit under ERISA, 29 U.S.C. 1132(a)(1)(B), the district court found the plan ambiguous and the administrator’s interpretation reasonable. The Third Circuit affirmed. The plan’s terminology, silence, and structure render it ambiguous, so the plan accords the plan administrator discretion to interpret ambiguous plan terms. The mere existence of a conflict of interest is alone insufficient to raise skepticism of the plan administrator’s decision.